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We are Games & Technology focused Growth Company that is building a Smart Network with our Build & Buy strategy. Q2 2021 Results September 2021
We are
Games & Technology focused Growth Company that is
building a Smart Network with our Build & Buy strategy.
Q2 2021 ResultsSeptember 2021
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Disclaimer
2
Tal ShohamCMO
Executive Management
Anton GauffinCEO
(Founder)
Grzegorz KaniaCFO
Elad KushnirCOO
3
We are on track to deliver adjusted EBITDA in line with market expectations
Another quarter of record high revenue in both core franchises and new franchises
Traffic Puzzle handover going very well and the game continues to deliver strong results. Our confidence continues to grow.
+10% yoyTotal revenue growth
in Q2 2021
Q2 2021 Summary
8.4%Record high conversion rate
in core franchises
+36% yoyARPDAU
in core franchises
12%new franchises
as % of total revenue
4
5
Business UpdateQ2 2021
Continued improvement on already industry-leading monetization metrics
● Record high revenue generated in March 21
Core franchises
Q2 2020 Q2 2021
ARPPU
$37
$45
Q2 2020 Q2 2021
Core revenue
$86m$85m
● Record high quarterly revenue
● Excellent monetization metrics, paying players stay and pay more
● Conversion up to 8.4% by 1.2pp yoy
● Strong roadmap delivery alongside consistent adding of world class slots content
● Continued investments in technology driven monetization capabilities and game operations via Huuuge Fuel Q2 2020 Q2 2021
ARPDAU
$1.44
$1.96
+36%+2%+22%
6
Huuuge Casino - Spin the best free slots
7
● Casino Fever City Edition!● New awesome slots!
Join clubs and hit Jackpot!
989.2K Ratings
What’s New?
7
● Record high revenue generated in March 21
New franchisesRevenue diversification strategy delivering results
Q2 2020 Q2 2021
New franchises as (%) of total
revenue
5%
12%Solid increase across the board
163 yoy revenue %
Q2 2020 Q2 2021
Revenue from new franchises
2.0x yoy DPU
$11m
$4m
● We expect Traffic Puzzle to be the main growth engine in the upcoming quarters, hence we will be prioritizing it on all levels
● Continued investment in our build strategy
● Deep integration of all Huuuge Fuel components
8
Traffic Puzzle - Unique Match 3 Game
9
● Now 3,000 boards available!● New MASTER LEVELS
Car Puzzle like no other!
200.4K Ratings
What’s New?
Huuuge Fuel integration in final stage
Huuuge fuel integration is ongoing. We expect our Dynamic Configuration Engine, our Segmentation Engine, and our Player Center to go live in Q3/Q4.
Handover status update
Handover is in the final stages. 40 talented Huuuge team members are running the game in full force.
Traffic Puzzle Headway
Cautious UA increase the 2H 2021
Despite having planned to take a slower approach, we have been able to positively impact the game KPIs during the handover and have cautiously begun acceleration of the user acquisition spend to drive growth
DAU
10
Superb results during handover. We are more confident than ever
Traffic Puzzle
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2019 2020
Q2
2021
● Record high revenue in Q2 2021 generated (+4x higher yoy, 10% qoq) despite no additional UA investment qoq
● August revenue record (+13% m/m) thanks to product improvements (changes in the First Time User Experience drove DAU up to 200k)
● Positive impact on KPI’s from internal monetization know-how & product knowledge
● Lots of upside ahead of us - TP team is only 4 months old in Huuuge and not yet fully plugged into our system
4.0x yoy revenue
3.6x yoy DAU
+10% qoq revenue
14% qoq DAU
Traffic Puzzle revenue ($ m) and DAU
$8.3m
$2.1m
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Conversion (%, monthly) ARPPU (USD) ARPDAU (USD)
Core competencyMonetization via know-how & technology
Know-How Technology
Reasons to Play Stay and Pay
~91% of our players have yet to pay in our games. This is a clear untapped market within our existing user base 12
FuelWith Huuuge Fuel platform our internal
and partner studios are driving our future growth
BUILD owned and operated studios
PUBLISHING PARTNERS
BUY Acquired studios
Financial UpdateQ2 2021
Financial highlights
Adjusted EBITDARevenue
$89m
$98m
$27m
$16m
Q2’20 Q2’21 Q2’20 Q2’21
+$15MIncrease in user acquisition marketing campaign costs
-$11MDecrease in adj. EBITDA
in Q2 2021
+10%Revenue total
growth in Q2 2021
UAMC
$20m
$35m
Q2’20 Q2’21
36% of revenue
22% of revenue
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1. Revenue growth despite high base and market slow down. Growth driven by new franchises that increased by 163%.
2. Cost of sales consists mainly of platform fees paid to distributors (98% of costs) and gaming servers expenses. Slight increase in gross profit on sales margin was mainly due to the higher revenue vs last year generated from advertising.
3. Significant increase in UAMC due to investing in building player base of the new franchises to accelerate growth
4. General sales and marketing expenses growth due to development of in house marketing teams and competences
5. Increase in G&A resulted mainly from employee-related costs, ESOP and public company readiness related expenses
USD m Q2 2021 Q2 2020 Change
Revenue 97.5 88.9 10%
Gross profit/(loss) on sales 68.8 62.1 11%
Sales and marketing expenses (39.3) (23.7) 66%
- UA marketing campaigns (34.8) (19.9) 75%
- General sales and marketing expenses (4.5) (3.8) 17%
Research and development expenses (8.0) (7.8) 4%
General and administrative expenses (10.1) (4.5) 124%
Other operating income/(expense), net (0.1) (0.3) -63%
Operating result 11.2 25.9 -57%
Finance income/expense, net 0.4 (8.2)
Profit/(loss) before tax 11.7 17.7 -34%
Income tax (2.5) (3.5)
Net result for the period 9.1 14.2 -36%
Financial performance Q2 2021
01
02
02
03
01
0304
0405
05
16
USDm Q2 2021 Q2 2020 Change
EBITDA 13.3 26.5 -51%
ESOP 2.4 0.8
Adjusted EBITDA 15.6 27.3 -43%
Adjusted EBITDA margin (%) 16.0% 30.7%
Net result for the period 9.1 14.2 -36%
ESOP 2.4 0.8
Series C shares revaluation - 9.0
Adjusted Net Result 11.4 23.9 -52%
Adjusted Net Result (%) 11.7% 26.9%
Adjusted vs reported
17
USDm 30 June 2021 31 Dec 2020
Non-current assets 55.6 17.3
Current assets 216.8 124.5
Total assets 272.4 141.8
Total equity 200.3 (96.0)
Non-current liabilities 4.7 183.0
Preferred shares - 176.6
Current liabilities 67.4 54.8
Total equity and liabilities 272.4 141.8
Balance Sheet
01
02
1. Non-current assets increase due to acquisition of Traffic Puzzle game ($39m)
2. Current assets increase thanks to proceeds from IPO
($100m).
3. The structure of total liabilities changed due to the
conversion of preferred shares Series C into common shares
87% of current liabilities are trade and other payables
03
01
02
03
0404
18
USDm Q2 2021 Q2 2020
Pre-tax profit 11.7 17.7
Operating CF 8.5 26.5
Investing CF (11.4) (1.5)
Financing CF (0.5) (0.6)
Change in cash (3.4) 24.4
Cash End of Period 180.3 75.4
1. Changes in OCF due to:
(1) lower EBITDA yoy, as well as
(2) decrease in trade payables (increase in balance sheet connected with
the Traffic Puzzle liability included in the payables line)
2. Changes in CFI mainly attributable to acquisition of Traffic Puzzle game
and cash outflow of USD 9.5m
01
02
01
02
Cash Flows Q2 2021
19
Strategy UpdateQ2 2021
Buy -> Publishing
Two new partnerships signed in Q2 2021
Many more in pipeline and in detailed talks with four more
2021 Focus - Build & Buy strategy
Buy -> M&A
We are in talks with 3-4 potential targets
Build
Systematic build over long term leads to further organic growth
Multiple new games and game ideas in different stages of development
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Appendix
Appendix - KPI’sFY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Total DAU 632,113 850,717 911,048 947,188 874,002 876,371 913,997 979,820 980,224 970,211 944,456 893,861 888,781 773,229
Core Franchises 509,356 772,029 769,134 628,119 801,215 758,581 769,710 747,029 721,866 645,541 577,293 567,775 545,487 483,502
New franchises 0 438 101,328 300,469 22,795 80,562 111,012 190,941 228,229 303,097 354,497 316,055 331,953 277,612
Other 122,757 78,250 40,586 18,600 49,992 37,229 33,275 41,850 30,129 21,572 12,667 10,032 11,341 12,115
FY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Total MAU 3,321,543 3,716,410 3,984,784 4,701,679 3,524,091 3,715,666 4,198,691 4,500,685 4,575,143 4,879,425 4,787,025 4,565,123 4,379,981 3,511,447
Core Franchises 2,545,316 3,193,507 3,032,904 2,353,499 3,061,698 2,869,545 3,209,598 2,990,775 2,798,655 2,399,617 2,158,465 2,057,258 1,934,096 1,689,879
New franchises 0 3,844 715,394 2,249,652 177,605 646,534 796,298 1,241,141 1,610,213 2,364,926 2,569,348 2,454,120 2,379,211 1,751,154
Other 776,227 519,058 236,485 98,528 284,788 199,588 192,796 268,770 166,274 114,881 59,211 53,745 66,675 70,414
FY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Total DPU 14,152 21,357 25,498 27,146 24,888 23,595 26,100 27,410 27,535 27,861 25,412 27,775 28,596 26,148
Core Franchises 13,265 20,890 23,831 24,095 24,522 23,113 23,409 24,279 24,962 25,160 22,435 23,823 23,240 20,820
New franchises 0 2 1,493 2,982 93 324 2,573 2,981 2,469 2,619 2,927 3,913 5,290 5,260
Other 887 464 175 69 273 157 118 150 105 81 51 40 66 69
FY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Total MPU 139,833 203,651 218,297 212,384 217,919 201,852 232,518 220,898 219,570 205,984 203,445 220,535 220,640 200,753
Core Franchises 125,904 196,503 198,530 174,869 212,463 197,052 200,252 184,353 189,851 173,798 165,257 170,570 160,665 142,146
New franchises 0 35 17,470 36,697 1,509 3,002 30,738 34,631 28,411 31,252 37,644 49,479 59,055 57,528
Other 13,929 7,113 2,297 818 3,947 1,798 1,528 1,914 1,307 934 544 486 921 1,079
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Appendix - KPI’sFY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Conversion (daily, DPU/DAU) 2.2% 2.5% 2.8% 2.9% 2.8% 2.7% 2.9% 2.8% 2.8% 2.9% 2.7% 3.1% 3.2% 3.4%
Core Franchises 2.6% 2.7% 3.1% 3.8% 3.1% 3.0% 3.0% 3.3% 3.5% 3.9% 3.9% 4.2% 4.3% 4.3%
New franchises n/a 0.5% 1.5% 1.0% 0.4% 0.4% 2.3% 1.6% 1.1% 0.9% 0.8% 1.2% 1.6% 1.6%
Other 0.7% 0.6% 0.4% 0.4% 0.5% 0.4% 0.4% 0.4% 0.3% 0.4% 0.4% 0.4% 0.6% 0.6%
FY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Conversion (monthly, MPU/MAU) 4.2% 5.5% 5.5% 4.5% 6.2% 5.4% 5.5% 4.9% 4.8% 4.2% 4.2% 4.8% 5.0% 5.7%
Core Franchises 4.9% 6.2% 6.5% 7.4% 6.9% 6.9% 6.2% 6.2% 6.8% 7.2% 7.7% 8.3% 8.3% 8.4%
New franchises n/a 0.9% 2.4% 1.6% 0.8% 0.5% 3.9% 2.8% 1.8% 1.3% 1.5% 2.0% 2.5% 3.3%
Other 1.8% 1.4% 1.0% 0.8% 1.4% 0.9% 0.8% 0.7% 0.8% 0.8% 0.9% 0.9% 1.4% 1.5%
(USD) FY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
ARPDAU 0.66 0.76 0.78 0.96 0.80 0.78 0.77 0.78 0.86 1.01 0.90 1.08 1.20 1.39
Core Franchises 0.80 0.83 0.90 1.36 0.87 0.89 0.88 0.96 1.11 1.44 1.38 1.55 1.72 1.96
New franchises n/a 0.10 0.18 0.19 0.05 0.04 0.25 0.22 0.17 0.15 0.15 0.28 0.38 0.45
Other 0.07 0.09 0.07 0.08 0.08 0.05 0.07 0.05 0.06 0.09 0.10 0.09 0.08 0.06
(USD) FY 2017 FY 2018 FY 2019 FY 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Daily ARPPU 28.7 29.9 27.8 32.8 28.0 28.7 26.9 27.7 30.1 34.7 32.6 33.7 35.7 39.5
Core Franchises 30.2 30.4 28.9 35.3 28.3 29.1 28.7 29.6 31.9 37.0 35.3 36.9 40.3 46.8
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Appendix - P&L, Balance Sheet, Cash Flowin thousand USD Q2 2021 Q2 2020
Revenue 97,543 88,944
Cost of sales (28,736) (26,807)
Gross profit/(loss) on sales 68,807 62,137
Sales and marketing expenses (39,299) (23,694)
user acquisition marketing campaigns (34,816) (19,878)
general sales and marketing expenses (4,483) (3,816)
Research and development expenses (8,048) (7,753)
General and administrative expenses (10,099) (4,511)
Other operating income/(expense), net (120) (325)
Operating result 11,241 25,854
Finance income (120) 422
Finance expense 529 (8,578)
Profit/(loss) before tax 11,650 17,698
Income tax (2,546) (3,512)
Net result for the period 9,104 14,186
Exchange gains/(losses) 374 360
Total income for the period 9,478 14,546
in thousand USD Q2 2021 FY 2020
ASSETS
Total non-current assets, including: 55,574 17,347
Right-of-use asset 6,607 8,646
Goodwill 2,747 2,838
Intangible assets 40,641 1,459
Total current assets, including: 216,796 124,485
Trade and other receivables 35,889 29,226
Cash and cash equivalents 180,352 94,158
Total assets 272,370 141,832
EQUITY
Total equity 200,305 (96,008)
LIABILITIES
Total non-current liabilities, including: 4,671 183,019
Preferred stock - 176,606
Total current liabilities, including: 67,394 54,821
Trade and other payables 58,479 37,797
Total equity and liabilities 272,370 141,832
in thousand USD Q2 2021 Q2 2020
Profit/(loss) before tax 11,650 17,698
Adjustments for:
Sum of non-cash changes in interest, depreciation, amortization, FX differences, prepayments and profits on disposal
3,587 1,430
Non-cash employee benefits expense - share-based payments 2,336 785
Non-cash remeasurement of preference shares liability - finance expense - 8,950
Changes in net working capital (7,343) (2,501)
Cash flows from operating activities 10,230 26,362
Income tax paid (1,750) 127
Net cash flows from operating activities 8,480 26,489
Cash flows from investing activities, including:
Acquisition of property, plant and equipment and intangible assets (1,913) (478)
Acquisition of subsidiaries, net of cash acquired - (1,064)
Acquisition of IP rights (9,500) -
Net cash from investing activities (11,413) (1,539)
Cash flows from financing activities, including:
Transaction costs of the issue of equity instruments (109) -
Net cash from financing activities (468) (587)
Net increase/(decrease) in cash and cash equivalents (3,401) 24,363
Cash at the end of the period 180,352 75,444
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Appendix - GlossaryARPDAU Average revenue per daily active user.
ARPPU Average revenue per paying user.
DAU The number of individual users who played a game on a particular day.
DPU The number of players (active users) who made a purchase on a given day.
Live OpsActivities aimed at increasing the player engagement, among others, by adding new features to games, recurring and one-off virtual events in which players can participate, and active management of promotions within the game.
MAU The number of individual users who played a game during a particular month.
Monthly ConversionThe percentage of MAU that made at least one purchase in a month during the same period In-app purchases. Payments made by users after downloading a game, in connection with the purchase of additional game features. In-app purchases can be made through various non-cash payment instruments (e.g. payment card, transfer), various electronic channels (e.g. e-banking, mobile phone) or using payment service providers (e.g. PayPal).
MPU MPU is defined as the number of players (active users) who made a purchase at least once in a given month.
Retention The number of users who continued to use the game after a certain period of time after downloading the application.
UAMCUser acquisitionmarketing campaigns
Process of the acquisition of users through paid campaigns or promotional offers
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